"Storm chasing" has something of a cult following in the
United States. Every year, adventurous
thrill-seeking people jump into heavily armored and modified vehicles for the
express purpose of attempting to experience some of the most volatile weather
the world has to offer.
I have no idea what would cause a person to “want” to get as
close as possible to a violent tornado system whilst still adhering to “safety
standards”.
We see the same thing with investors who pour over 1, 3, and
5 year returns from various funds. This type
of analysis is among the worst you can possible do given the mean-regressive
nature of the vast majority of funds, and also because the business of mutual
funds is structured to deliver benchmark beating returns. Investors who do this are going right
precisely where its most dangerous for future returns…they are The Return
Chasers, and I have no idea what would cause a person to chase the
self-published returns that suffer from “adverse selection” problems either.
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